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Information system management

Kellogg

Executive summary

Information systems are critical to the success of present age organization and with the increase in size of organization role of information systems get enhanced. Present paper describes the role of information system for Kellogg. It has been explored in the present paper that the information system implemented in Kellogg such as office management system, transaction processing system, management information system, decision support system and expert management system are critical for the organizational management. Some business function specific information systems are in place such as warehouse management, account management and customer relation which add to the better handling of the business functions.

Information system can be defined as the complementary network which is created through the mix of software and hardware in order to collect, process and distribute data for the several business operations. The basic role of any information system is to support & manage the operation and helping in the decision making process. Information systems have their major role in managing several business functions in present age organization where in the key business functions, in the organization such as sales, warehouse, accounts and CRM are managed by the information systems specially designed for these business functions (Alter, 2011). Some of the information systems purely designed in order to handle the business functions include marketing & sales information system, production & manufacturing information system, accounting & finance information system and human resource management system. Further these categories of information management systems can be further sub divided such as the production & manufacturing information system can be categorized under warehouse management, production management & inventory management systems etc.

Kellogg is one of the leading readymade foods manufacturing company around the globe headquartered in Michigan, USA. Kellogg was established in year 1905 by Will Keith Kellogg and company has reached a level where in the revenues, in 2012 are $14.20 billion annually (Layton, 2010). Kellogg was the first organization which started the manufacturing for the readymade food products, and it deals into major food categories such as cereals, cookies, crackers, Toaster pastries and frozen waffles etc. Kellogg has worldwide operations with more than 31000 people working globally for the Kellogg. In order to manage such widespread operations company require a high level of information management system so that various business functions of the organization can be managed with high efficiency. Hence role of information management system in the organization is vital (Phil, 2010).

The aim of the current paper is to analyze the role of information management system for Kellogg and its worldwide operations into the readymade food manufacturing industry. Present paper would look into the various information system domains such as operational information system, management information system, transaction processing system and their role in order to manage business functions in Kellogg. Further present paper would focus on the role of information system in order to carry out the day to day activities (Steinbreder, 2009). SWOT analysis would be carried out in order to understand the internal factors for the Kellogg in order to analyze the implementation of IT in Kellogg.

There are basically five major types of information system used in the organization, in the present age which helps in order to manage business operations and day to day functioning for the present age organizations. For Kellogg use of these information systems in order to manage the business functions can be given as under:

Office information system: Office information system implemented by Kellogg has the major objective to enhance the communication & work flow among the employees of the organization spread worldwide. With the help of office management system or office automation system established by Kellogg it is possible to work on the systems and the same information can be accessed by the employee of Kellogg working worldwide (Jessup & Joseph, 2008). Some of the major activities carried out with the help of office information system include creation/distribution of graphics, scheduling, sending documents and accounting etc. Office information systems are common to all users in the organization where in employees from executive level to management level has the access to the information system.

Transaction processing system: Transactions processing systems have been implemented by Kellogg in order to capture the data pertaining to daily transactions. Some of the major transactions types included in the transaction processing system are deposit, payments, reservations and order etc. major activities carried out in the transaction processing system for Kellogg include recording the customer order, registering new dealers or recording the supplier payment etc. An action confirmation or response can be given through transaction processing system such as thank you notice for the customers of the company or generation of employees’ paycheck on the due date for the salaries (Coy, 2004). Kellogg has implemented online transaction processing systems which are able to capture the transactions online and can be updated real time for accessing data immediately.

Management information system: Management information systems are used in order to organize information into accurate and timely manner so that managerial level people can access these data and through comparison of data decision making process can be done. Kellogg makes use of the continuous system generated MIS which are circulated to the management team in order to report on the weekly basis regarding the cost, revenue and other business performance aspects related with the organization. Management information system implemented in Kellogg is such that it results into three types of reports which are detailed, summary and exception. Detailed report provides the transaction processing data, and detailed order report can be considered as the example of detail report (Marc & Lynne, 1995). Summary information is the format in which reader can review the information quickly. Exception reports are the details which are out of the normal course of business.

Decision support system: Decision support system has been implemented in Kellogg so as to help the higher level executives to make decisions based on the management information system report generated by lower level information systems in the organization. Decision support systems implemented in Kellogg makes use of the internal as well as external source data. In addition to the normal features of the DSS, Kellogg has implemented an advanced level information system for executive named Executive information system.

Expert system: Expert systems in Kellogg have been implemented in order to store and human knowledge working in the organization and based on the knowledge stored, it imitate the reasoning which can be used for the decision making purpose in the absence of the expert whose knowledge have been used for the decision making purpose. Expert systems are an advanced version of the knowledge management systems being implemented by several organizations (Culnan, 2005).

3.0 Role of IT in key business functions

In order to carry out the several business functions in Kellogg based on the business operations different information systems have been designed. These information systems designed by Kellogg basically used for the specific functions, for example, accounting information system, warehouse information system, human resource management system or marketing information systems. These information systems are accountable for managing the entire business function for which the information function has been designed. Some of the critical business function implemented by Kellogg can be given as under:

Marketing & sales information system: A simplistic form of marketing & sales information system implemented in Kellogg can be given through figure 1 below. As evident in the figure below that there are mainly three parts for the marketing information system which are developing information through several records, marketing managers who analysis, plan and implement marketing tactics and marketing environment which constitutes target markets, marketing channel, competitors and macro environmental factors etc (Keen, 2001).

Warehouse management information system: Figure 2 below shows the schematic for the warehouse management system implemented in Kellogg which includes the process from setting up the warehouse to the inventory stocking system. As evident from the figure below that warehouse management system regulates the entire process from taking the order, packaging, order allocation, replenishment, order waiving, shipping and restoring the inventory to manage the stock levels in the warehouse so that no out of stock or access stock condition arises in the warehouse.

Figure 2: Showing the warehouse management system for Kellogg

Accounts management system: Account management information systems are a vital part of Kellogg’s overall information system and used to manage the various business aspects related with the accounting process (Mingers and Stowell, 2007). Various accounting transactions are recorded in these information systems along with management of the information into proper manner so that higher level executives can take help of these systems so as to make decision pertaining to the finance & account aspects for the organization.

Customer relation management system: Customer relation management systems are important for every organization involved into direct sales of the product and hence Kellogg needs customer relation management system in order to manage the existing system and also to identify the potential customers with the help of these systems. These systems are helpful in order to generate customer centric communication by identifying the target segment of the organization (Laudon and Laudon, 2006).

4.0 SWOT analysis

Present section of the paper would look into the strength, weakness, opportunity and threats for Kellogg in order to analyze internal environment in the company which can be given as under:

4.1 Strength

The major business strength for the Kellogg can be listed as under:

Widespread business operations: Kellogg has business operations which are widespread into several countries, the manufacturing facility established by Kellogg were located in more than 18 countries and marketed into more than 80 countries globally. Such widespread operations of Kellogg help in establishing a strong visibility and presence into the global markets. This helped in establishing the strong brand presence and competitive advantage into the international markets (John and Joe, 2002).

Marketing campaign: Kellogg is known for its great initiatives where in time to time company’s marketing department has successfully launched the marketing communication programs which has remained successful and have created strong product & brand awareness for Kellogg.

Earth Day celebration: One of the public relation initiatives taken by Kellogg named small change big difference for earth day celebration has remained globally successful where in with the help of this Kellogg has created widespread relationship with their target audience. Such initiatives carried out by Kellogg have helped them to gain positive word of mouth publicity for the organization (Jeffrey, 2008).

Fighting hunger: Another major initiative for Kellogg was fighting hunger where in this initiative was carried out in collaboration with Walmart. This initiative has remained highly successful, and Kellogg has been able to creative high publicity with such initiatives.

Large workforce spread globally: Kellogg has the total workforce of 30000 which is spread globally within 80 countries and this workforce helps Kellogg to carry out their business operations.

High brand strength & brand recall: Kellogg has high brand strength which is the top of the mind for the target consumer segment. Breakfast cereal brands for Kellogg are among globally renowned and having top most position.

Health conscious selection: Kellogg has done the marketing communication in such a way that the selections of food categories marketed by Kellogg are into the heart healthy selection range.

4.2 Weakness

Some of the major weakness for the Kellogg brand into the market can be given as mentioned below:

Complementary nature of snacks: Major food products marketed by Kellogg are into the snacks category, and it is the general perception that the snacks can’t provide the complete breakfast, and they are just complementary to the overall breakfast.

Lack of innovations: The market for readymade food is quite dynamic and major food players are surviving due to their innovative nature of the product. But Kellogg has not made many innovations into the readymade food category which has proved the biggest weakness for the organization (Tomson and Ziobro, 2012).

High sugar content: Several times Kellogg products have been criticized by the customers due to their high sugar content which has lead to reducing market share for Kellogg in specific food categories such as Chocos and Crispix.

4.3 Opportunities

Major opportunities confronted to Kellogg into the international markets can be given as below:

Collaboration: Kellogg though has its presence in more than 80 markets worldwide but still there are so many markets which can be catered by Kellogg through collaborations and joint ventures with the local players. This tip up with the local players’ presence in the markets would help Kellogg to capture the market share at rapid phase.

Sponsorship: Kellogg needs to widespread the brand awareness in order to build a strong brand and for that visibility at global level is very important. Generally, Kellogg does not make a part of the bigger events happening worldwide hence sponsoring a big event like Olympics can help Kellogg to create the high brand image.

Cartoon comic series or comic show: Kellogg targets the younger generation where in the major target segment for the company are children in the age range from 7 years to 18 years. Starting a cartoon comic series or comic show would help the company to establish a strong attachment with the target audience which would help to develop a loyal customer base.

Changing life style: Consumer life style is changing rapidly where in present age consumers does not have much time to prepare the breakfast and hence demand for the readymade breakfast is increasing in lieu of shortage of time (Phil, 2010).

Takeover & expansion: Kellogg has the strong financial position in current time which can be leveraged in order to make the expansion in the international markets with the help of takeovers. Further expansion opportunities are there with the company in terms of product expansion where in with innovative product category existing product categories can be expanded or new product categories can be developed.

4.4 Threats

Major threats confronted to Kellogg in current market can be listed as under:

Intense competition in readymade food market: Readymade food market is characterized by intense competition where in so many industry players are fighting for the same share in the entire industry. Some of the major players which offer intense competition to Kellogg in international markets include Quaker, Post, Cadbury, Familia, Tilo, Uncle Sam, Nestle and Torto etc.

Food regulations by government: Another major threat for the Kellogg is strict regulations into the food category by government authorities. Food authorities worldwide are imposing strict regulations on the industry players in order to ensure high quality foods which have been prepared with the international standards. In the case, these standards are achieved there can be problems for Kellogg (Steinbreder, 2009).

Conclusion

Present paper has explored the usage of information systems in Kellogg, and it has been established that information systems have the vital role in managing the various business functions for the organizations. Further several business function, specific information system, are important in order to manage and develop the business functions into effective manner.

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